When TV producer Jamie Tarses turns to her friend Pamela Shamshiri of Commune Design for advice, a small renovation blossoms into a top-to-bottom transformation—and an even deeper bond.

Here's a novel way to complete a major home renovation: Talk about paint colors and room configurations every morning at the gym during workouts with your interior designer. That's how Jamie Tarses, one of Hollywood's most successful television producers, and designer Pamela Shamshiri, a partner in the Los Angeles–based firm Commune Design, often stayed on top of the details during the complete remake of Tarses's 1920s Spanish-style onetime bachelorette pad in the Hollywood Hills into a larger, more livable house.

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The two women met because their kids go to the same school and have become close friends. They were exercise buddies before they started working together. "We would talk about the house while we were on the elliptical machine," says Shamshiri. Tarses jokes, "Pam was trying to get a workout in, and I was making her work."

Shamshiri admits that, initially, she was "terrified" to tackle a major renovation with a friend. "Design projects are always stressful, and this ended up being a massive undertaking," says the designer, whose firm has made a name for itself with its eclectic projects, both commercial (the Ace hotels in Palm Springs and L.A.) and residential. The pair's relationship shifted from personal to professional when Shamshiri offered up her services in a silent auction benefiting their kids' school. Tarses—who spent nearly a decade as an executive at NBC and has produced such series as Happy Endings, Franklin & Bash, and the upcoming TBS comedy Your Family or Mine—was the lucky bidder. "The allotment was to work on one room," Shamshiri notes.

Her client's room choice surprised Shamshiri. "The whole start of this was that I wanted to move a staircase," says Tarses. The stairs in question—at the back of the house, off the kitchen and leading to the lowest level of the three-story house—"were narrow and steep, and people would hit their heads." The bigger issue was that the stairs were so hidden that, even though the bottom floor included a screening room, "no one went down there," says Tarses.

It was obvious where the stairs needed to go: at the front of the house, as a continuation of the main staircase (which leads from the ground floor up), to create a seamless flow. That one change produced a cascade of issues—and opportunities. With the stairs gone at the rear, why not open up a wall into the garage and turn it into a family room? "I didn't think we needed another room," says Tarses, "but the irony is that we now spend most of our time there. It all started really casually, and then it kept going from there."

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Terraces were expanded, and windows and French doors were added, all of which increased the enjoyment of the stunning views of the Sunset Strip and beyond. The kitchen was made more family-friendly by opening it up to include an adjacent dining area. "Jamie has a love for Spanish style, and I think she wasn't sure we could be true to the roots of the house and accomplish as many of the conveniences of modern living as we did," Shamshiri explains.

In the end, the family—Tarses and her restaurateur husband, Paddy Aubrey, who co-owns Silver Lake's Hyperion Public, have two young children—moved out for almost two years as the plans grew in ambition. "I started to realize as we got into it that redoing a house is an emotional thing," Tarses admits. "You keep driving home to check on the place you've been in for over a decade, and less of it is standing every time. It was basically gone. They took it down to the studs."

The decor hews to Commune's aesthetic—a sort of luxe casualness—featuring a layered look informed more by eye and impulse than rigid plans. "I wish I were one of those designers who can walk into a room and say, 'It should be blue. It should be this. It should be that,'" says Shamshiri. "But then I don't think it would be something you and your client arrive at together. We spend a lot of time with clients on the front end, figuring out what the experience is that they really want. Toward the end, though, there are lots of ways you can go with fabric for a sofa, and we like to keep some decisions loose."

The furnishings are a happy mix of color, pattern, and texture. Some rooms feel particularly true to the home's Mediterranean bones, such as the kitchen's cement-tile floors and Provençal-blue cabinets. Others present visual curveballs, like the mirrored-tile walls in a guest bath ("the disco bathroom," Tarses calls it).

Through it all, the pair's friendship never frayed. "I liked the house I had before. But I don't think I ever truly loved my house until Pam got involved," says Tarses. "It actually made us closer."